The European Commission has cleared the takeover of FlexPac, the flexible packaging division of Hydro Aluminium, by Alcan of Canada. Although the acquisition will increase Alcan's share of the European market for flexible packaging, Australia's Amcor will remain the market leader.
On 23 January the Commission received notification of a proposed agreement under which Alcan, a market leader in aluminium and speciality packaging, would acquire sole control of FlexPac, the flexible packaging division of Hydro Aluminium Deutschland, itself a wholly owned subsidiary of Norsk Hydro of Norway. FlexPac is to be merged with Alcan's own packaging division, and after investigation, the Commission concluded that there was no risk that Alcan Packaging would have a dominant position in Europe after the takeover. This was irrespective of whether the relevant product market was considered to encompass all flexible packaging or the individual markets for flexible packaging products for each end-use, in which both parties are active, including food, medical devices, pharmaceuticals and other non-food products.
In all cases, it was found that Alcan would face effective competition from strong rivals such as Amcor, Austrian company Teich and Pechiney Soplaril of France.
The operation concerns the production and supply of flexible packaging, including plastic and cellulose films, aluminium foils and papers used for the packaging of food, medical devices, pharmaceuticals, household products and other non-food products.
The flexible packaging unit has been a potential takeover target since it was acquired by Hydro during its take over of VAW Aluminium in January, 2002. It has annual sales of around €500 million with a workforce of about 3,000 in Germany, France, Turkey and Asia.
In a statement released at the time of the acquisition's announcement, back in November, Alcan said that "the proposed acquisition adds good value and represents an excellent platform for profitable growth. It would significantly enhance the company's global position in packaging, expanding its footprint technologically and regionally, particularly in the developing markets of Asia. Alcan would have world-class flexible packaging operations in Europe, Asia and the Americas".